IMF slashes China's 2012 growth estimate to 8.25%

Beijing,
Tue, 07 Feb 2012ANI

Beijing, Feb 7(ANI): The International Monetary Fund (IMF) has scaled down its forecast for China's 2012 economic growth from nine percent to 8.25 percent and warned that exports would be a significant drag on expansion in the upcoming two years.

The IMF has downgraded the prospects for global economic growth in 2012 to 3.25 percent from four percent because the Eurozone economy is expected to plunge into a recession this year.

"The risks to China from Europe are large and tangible," Murtaza Syed, resident representative of the IMF's Beijing office, said.

The IMF also predicted that China's economic growth could fall by four percent if the euro area experiences the downside scenario, which would see global growth falling by 1.75 percentage points.

But even in this worst-case scenario, China has room for a countervailing fiscal response, Syed said.

He said modest fiscal support to the economy is warranted taking into account uncertain global scenario. (ANI)